Yesterday evening, BMD Malaysia palm oil futures rose abruptly near the close, up 10% at 7040 ringgit/mt. As of the close of 18:00, BMD Malaysia Palm Oil Futures closed up 9.39% at 7,001 RINGGIT/mt.
Horse brown suddenly rose and stopped, and the market talked about it. There are rumors that Indonesia wants to cancel or buy back the near-month palm oil contract that has been sold. The Indonesian navy sent warships to stare at the cargo ship at the palm oil export port, forcing the buyer to negotiate with it.
Some industry insiders said that the above rumors have not been reported by any overseas authoritative media, and the source of the news cannot be verified, and the rate is probably false news.
Indonesia expands export ban: ban on the export of crude palm oil!
At 20:30 last night, Indonesia's Ministry of Economy held a press conference on palm oil export policy.
At the press conference, Indonesia announced that it would expand its export ban to include crude palm oil and other products, which will increase uncertainty in the market, which has experienced large price fluctuations. Airlangga Hartarto, coordinating minister for economic affairs, said the ban would be extended to coarse palm oil, RBD palm oil and discarded cooking oil. The policy will be implemented from April 28 and continue until domestic edible oil prices fall. A day ago, he said the ban only applied to palm olein. Palm oil is processed and transported in different forms. The fruit of the oil palm tree is crushed to produce coarse palm oil. Impurities are removed through refining (R), bleaching (B), deodorization (D) and other processes. After further processing, the palm liquid oil produced is the most widely used edible oil in the world. Non-edible oils are used to make biodiesel and soaps.
What are the immediate consequences of the ban? Guoyuan Futures analyst Liu Jinlu said that the ban is equivalent to overturning palm oil that was previously only applicable to refined, bleached and deodorized, and since Indonesian palm oil exports account for about 60% of the world, the introduction of the ban will significantly reduce global palm oil supply in the short term. Russian-Ukrainian conflict and Canada canola new crop planting area reduction, resulting in global sunflower oil and rapeseed oil future supply of concerns, due to palm oil has a certain price advantage, the substitution effect is strong, global oil demand turned to palm oil, and Indonesia as the world's largest palm oil producer and exporter, at this time the introduction of palm oil export ban, undoubtedly aggravated the global oil supply crisis.
According to Liu Jinlu, the original intention of Indonesia's palm oil export ban was to reduce domestic edible oil prices and alleviate domestic edible oil shortages. The previous price limit policy and DMO20 and DMO30 (internal supply guarantee policy) are also based on the same considerations, but the policy has exacerbated the trend of global oil prices in the context of global vegetable oil supply shortage, and the price of Indonesian palm oil has not fallen smoothly under the linkage effect.
"Logically, the ban should be a short-term act. On the one hand, Indonesia's domestic palm oil price reduction and the international market price rise is contrary to the high, on the other hand, from the perspective of industrial development, the ban will impact the Indonesian domestic palm oil industry chain in the short term, Indonesian palm oil is in the production cycle, the domestic crushing plant will face the pressure of expansion under the sharp reduction of exports, the backlog of crude palm, the export profit of downstream refineries will fall, and it is not excluded that the suspension of production protection behavior or the price will be held to ensure profits, which may deviate from the original intention of implementing the ban. Liu Jinlu said
Yesterday afternoon, the domestic futures market closed, and the variety of oilseeds rose across the board. Palm oil rose more than 4 percent, soybean oil rose 3.18 percent, and vegetable oil rose more than 2 percent. At the opening of the night session, the palm main contract rose nearly 7%, and the soybean oil main contract rose more than 3%, but the intraday gains narrowed, and as of the close of 23:00, palm oil rose more than 2%.
In this regard, Haitong Futures analyst Kong Lingqi said that in addition to the fundamentals of the low inventory of the oil itself and the frequent changes in Indonesia's export policy that make the oil and fat disk fluctuate sharply, it is still necessary to pay attention to the external macro environment, the high international crude oil prices brought about by geopolitical conflicts and the changes in the raw firewood policy. Although the accumulation of oil and fat in the medium and long term is certain, but at present, due to the deep discount of the oil disk, the 2205 contract will still follow the logic of basis regression before delivery, and it is recommended that investors pay attention to the market expectations of Ma Palm's monthly supply and demand data near the end of the month.
Liu Jinlu believes that the Indonesian ban in the short term will fill the pressure of filling the global palm oil supply gap to Malaysia, and the expected sharp increase in horse palm demand will offset the impact of labor introduction and production increase in the second quarter to some extent, and the short-term price of horse palm will continue to rise. In addition, the effect of the ban on resolving the contradiction in Indonesia's domestic edible oil supply is still questionable, coupled with the repeated uncertainties of Indonesia's export policy, which is viewed as a short-term impact. In terms of internal disk, the domestic epidemic situation is repeated, the downstream demand is still relatively weak, the domestic import profit is upside down to buy ships is not good, the inventory is still at a low level in recent years, palm oil prices continue to rise, follow-up need to continue to pay attention to Indonesia's export policy and Malaysia's palm oil production.
Worse! Farmers in the number one exporter of rapeseed oil were reluctant to grow oil crops, and the area sown plummeted
The "bad news" on the supply side of grease and oil is still coming.
Statistics Canada said in a report on Monday that despite high prices and strong demand for canola, farmers are still inclined to grow alternative cereal crops, and Canada's rapeseed sown area is expected to fall by 7% this year to 20.9 million acres.
Canada is the world's largest exporter of rapeseed oil, but last year's drought saw Canada's production fall to its lowest level since 2007 and stocks are running out of steam.
Cliff Jamieson, a canadian cereal analyst at DTN, said in a latest report: "Grain stocks on July 31 are expected to hit a record low, with Durham wheat stocks expected to reach their lowest levels since the mid-1980s. Rapeseed stocks will also be unusually tight. ”
Jamieson also said that in terms of potential returns and strong demand, there are still many good crop options for Canadian agriculture this year, and weather will be a driver of planting decisions. "Canadian manufacturers will see more wheat, corn, lentils, soybeans and oats (demand), while they will reduce the area planted with canola, barley and peas."
According to the FBN Canada Planting Reports survey, the Canadian province of Saskatchewan saw the largest decline in rapeseed acreage, with a large amount of farmland turning to spring wheat. But the FBN said it was not optimistic about the spring wheat harvest, rating it as "neutral to slightly bearish".
What is the impact of the further decline in canadian rapeseed planting area on the oilseed market?
Kong Lingqi told futures daily reporters that from January to March, Agriculture Canada estimated that the planting area was about 8.8 million hectares and 21.745 million acres, and the current 20.897 million acres was lowered by about 4% from the previous one, and according to the previous yield of 2.31 tons/ha, the total output of this year was about 19.535 million tons, down 665,000 tons from the previous estimate of 20.2 million tons. The estimated year-end inventory of new crops in March was only 600,000 tons, which is already the lowest level in nearly three years, and if production is lowered, export demand will inevitably shrink to maintain a reasonable year-end inventory level, and the annual supply and demand of the rapeseed market will continue to remain tight.
"The current oil oilseed domestic and foreign inventories both at present and in the current crop year are maintained at a low level, from the market concerned about the Malaysian palm oil production data, the first 25 days of April production increased by 5.56% over the same period of the previous month, the export data of the first 25 days decreased by 13% from the same period last month, the supply increased and the demand fell, it is expected that the horse palm in April will show a slight accumulation of inventory, but after the introduction of the Indonesian export ban, about 200,000-300,000 tons of export demand per month or will be transferred from Indonesia to Malaysia. Therefore, it will slow down the rhythm of the Malay library. Kong Lingqi further analyzed.
This article originated from Futures Daily
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